Terms like WACC, P/E, and free cash flow show up throughout KashVector's stock tools with no explanation attached. This page collects plain-English definitions for all of them — what each term means, not what to do about it. Look for a dotted underline anywhere on a tool page for an inline definition, or browse the full list below.
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52-Week Range#
The lowest and highest price a stock has traded at over the past year. It shows how far the current price sits from its recent extremes.
A
Analyst Target Price#
The average 12-month price forecast from the equity analysts covering a stock, as compiled by Yahoo Finance. It reflects analyst opinion, not this tool's own view.
Audit Risk (Sustainalytics)#
A Sustainalytics sub-score, rated 1–10, assessing a company's exposure to risk in financial reporting quality, internal controls, and auditor independence. A lower score means lower assessed risk.
B
Beta#
A measure of how much a stock's price tends to move relative to the overall market. A beta above 1 means bigger swings than the market; below 1 means smaller swings.
Board Risk (Sustainalytics)#
A Sustainalytics sub-score, rated 1–10, assessing a company's exposure to risk from board structure, independence, and oversight effectiveness. A lower score means lower assessed risk.
C
Cash Runway#
How many months a company can keep operating at its current cash-burn rate before running out of cash, calculated from cash on hand divided by monthly cash outflow.
Combined Score#
The sum of criteria passed across the Buffett, Dalio, and Graham checklists shown together on one gauge, out of the combined maximum possible.
Compensation Risk (Sustainalytics)#
A Sustainalytics sub-score, rated 1–10, assessing how well a company's executive pay is judged to align with shareholder interests. A lower score means lower assessed risk.
Cost of Equity#
The return shareholders require for holding a stock, given its risk. Calculated via CAPM: risk-free rate plus beta × equity risk premium.
Current Ratio#
Current assets divided by current liabilities. It measures whether a company holds enough short-term assets to cover its short-term obligations.
D
Debt-to-Equity Ratio#
Total debt divided by shareholders' equity. It shows how much of the company is funded by borrowing versus owner capital. Yahoo Finance reports this as a percentage, e.g. 53.2 means debt equal to 53.2% of equity.
Dilution#
The increase in a company's total shares outstanding over time, typically from issuing new stock to raise capital or compensate employees. It reduces each existing share's proportional ownership.
Discounted Cash Flow#
Discounted Cash Flow (DCF) analysis works in three steps: forecast free cash flow for each year over a projection period; divide each year's figure by (1 + discount rate) raised to that year's power to find its present value; then add a terminal value representing everything beyond the forecast, treated as a perpetuity. Summing the present values gives firm value, from which net debt is subtracted to reach equity value per share.
Dividend Discount Model#
The Dividend Discount Model (DDM) projects a company's dividend per share forward using an assumed growth rate, then discounts each future dividend back to present value using the cost of equity. Because it works directly from dividends rather than free cash flow, it sidesteps the problem that bank deposits and insurer reserves make free-cash-flow-based DCF structurally unreliable for financial companies.
Dividend Yield#
Annual dividend per share divided by the current share price, as a percentage. It shows the cash income return relative to today's price.
E
Earnings Growth#
The percentage change in a company's net profit over a prior period. It shows whether bottom-line profit is expanding, contracting, or flat.
Earnings Per Share#
A company's net profit divided by its number of shares outstanding — the profit attributable to a single share.
Enterprise Value#
What it would cost to buy the entire company outright: market cap plus total debt, minus cash. It reflects the value of the underlying business, not just the equity slice.
EV/Sales#
Enterprise Value divided by annual revenue. Used to value companies with little or no profit, where a P/E ratio isn't a workable measure.
F
Franking Credits#
Under Australia's dividend imputation system, credits attached to a dividend representing corporate tax the company has already paid, which shareholders can use to reduce their own tax.
Free Cash Flow#
Free Cash Flow (FCF) starts from operating cash flow and subtracts capital expenditure — the money spent maintaining or expanding property, plant, and equipment. What remains is cash the business could theoretically return to shareholders, pay down debt with, or reinvest, without needing to borrow. It's the input most valuation models (like DCF) build from, because unlike reported profit it's harder to distort with non-cash accounting choices.
G
Gordon Growth Model#
The Gordon Growth Model (GGM) is the simplest form of a Dividend Discount Model: Intrinsic Value = D₁ / (Ke − g), where D₁ is next year's expected dividend, Ke is the cost of equity, and g is a single constant perpetual growth rate. Because it assumes one growth rate forever, it works best for mature, stable dividend payers rather than early-stage or highly cyclical businesses. Rearranging the formula to solve for g instead, given today's price, produces the implied growth rate the market is currently pricing in.
Graham Number#
A formula from Benjamin Graham estimating a conservative fair value: the square root of (22.5 × EPS × Book Value per Share). It combines earnings and asset value into one reference figure.
Gross Margin#
Revenue minus cost of goods sold, divided by revenue. It shows how much is left from each sale before operating expenses like marketing and R&D.
Growth Rate#
The assumed annual percentage increase used to project a financial figure — such as cash flow or dividends — forward across a valuation model's forecast period.
I
Implied Growth Rate#
The perpetual dividend growth rate that would make a valuation model's fair value exactly equal to today's market price, solved for by rearranging the formula. It shows what growth the market is currently pricing in.
Insider / Promoter Ownership#
The percentage of a company's shares held by its founders, directors, or promoters. Higher levels are often read as a sign management has a personal financial stake in the outcome.
Intrinsic Value#
An estimate of what a stock is worth today based on a valuation model's assumptions about future cash flows or dividends — distinct from its current market price.
M
Margin of Safety#
The percentage gap between a valuation model's estimated intrinsic value and the stock's current market price. A positive margin means the price sits below the model's estimate of value; a negative margin means the reverse.
Market Capitalisation#
The total value of all a company's shares: share price × shares outstanding. It's the market's real-time price tag for the whole business.
Multi-Stage DCF#
A Discounted Cash Flow variant that models profit margin improving gradually toward a target over several years, rather than assuming a stable margin from year one. Built for companies that aren't profitable yet.
N
Net Debt#
Total debt minus cash and cash equivalents. A positive figure means debt exceeds cash on hand; a negative figure (net cash) means the reverse.
Normalised Free Cash Flow#
An adjusted estimate of free cash flow used when a company's reported FCF is negative or distorted, typically derived from revenue multiplied by an assumed sustainable margin.
O
Operating Cash Flow#
Cash generated purely from a company's core business operations, before investing or financing activities. It's a check on whether reported profit is backed by real cash.
Operating Margin#
Operating profit divided by revenue. It measures profitability from core operations, before interest and tax, isolating how efficiently the underlying business runs.
P
Price-to-Book Ratio#
Share price divided by book value (net assets) per share. It compares the market price to the accounting value of the company's assets.
Price-to-Earnings Ratio#
Share price divided by earnings per share. It shows how many dollars the market is pricing for each dollar of a company's annual profit.
Profit Margin#
Net profit divided by revenue, as a percentage. It shows how much of every dollar of sales ends up as profit after all costs.
R
Return on Capital Employed#
Return on Capital Employed (ROCE) divides operating profit (EBIT) by capital employed — total assets minus current liabilities. Unlike Return on Equity, which only looks at shareholders' capital, ROCE also accounts for debt funding, making it a more complete efficiency measure for capital-intensive businesses. It's a metric used by several quality-focused Indian equity frameworks to identify companies that compound capital efficiently.
Return on Equity#
Net profit divided by shareholders' equity, as a percentage. It measures how efficiently a company turns shareholders' own capital into profit.
Revenue Growth#
The percentage increase in a company's sales over a prior period, usually year-on-year. It measures how fast the top line is expanding.
Risk-Free Rate#
The return available from a virtually default-free investment, typically a 10-year government bond yield for the relevant market. It's the baseline in the CAPM cost-of-equity formula.
Rule of 40#
A health check for growth companies: revenue growth % plus free cash flow margin % added together. A combined total of 40 or more is a widely used benchmark for growth achieved at a sustainable cash cost.
T
Terminal Growth Rate#
The constant annual growth rate assumed for cash flows or dividends forever after a model's forecast period ends. Kept low and sustainable, since no company can outgrow the whole economy indefinitely.
Terminal Value#
The estimated value of all cash flows (or dividends) beyond a valuation model's explicit forecast period, treated as growing forever at a constant rate. It often makes up the majority of a DCF's total value.
W
Weighted Average Cost of Capital#
WACC blends two components: cost of equity (via CAPM) and after-tax cost of debt, weighted by the company's actual mix of equity and debt financing. It's used as the discount rate in a DCF because it represents the minimum return the business needs to generate across all its capital to satisfy both shareholders and lenders. Small changes in WACC produce outsized swings in the resulting valuation, since it compounds over every projected year.